i have never seen anything like this in my life, no. no, this is the worst i have ever seen this. ♪ thanks for inviting us in to your home tonight and every night in 2012. because of you, special report again finished the year as the number one news show in all of cable. number three overall. it is not all about ratings and numbers but it is how in our business we do the scoreboard. so thank you for watching. that is it for this special report in 2012. we will continue to update you here on fox news channel on the fiscal cliff as you look live on capitol hill and we will do it fair, balanced, and captioned by closed captioning services, inc.

happy new year's eve. the countdown is on!n this is "the five"! 2012 is coming to a close and we are fired up and ready to gr for 2013. it has been quite a year, guys. we had to go through the five biggest stories of the year anf the worst stories in a minute. e table quickly. new year's eve. kimberly, love it or hate it? >> kimberly: i love new year's eve. it usually work new year's eve. but you get off in midnight just in time for celebratory inebry yens. >> eric: how you? >> juan: i'm not crazy about it. i bet somebody else is having a better time. >> eric: that is sad. >> juan: going at it. >> kimberly: glass half ful full. >> juan: but i think i make you in puerto rico around new

year's eve. it ran in geraldo at the restaurant and i thought it was fox in puerto rico. >> eric: we met in a hot tub. [ laughter ] i think that is juan williams. >> andrea: is that where the story ends? >> eric: i'm walking across a pool, walking by, drink in my hand. walk over and i think that's juan williams in the hot tub. juan? hey, bolling. just what reese up, dude? >> eric: i love new year's eve. it's my second favorite holiday. fourth of july is my favorite, midto feel summer. new year's eve is second. happy time of the jeer. >> andrea: i don't have any fun hot tub stories. >> kimberly: that you went to share. >> andrea: i actually like it. i used to not like it. inused to think it was totally overrated. i still kind of do, but i don't know. the last couple of new year's have been fun. i'm in to it. tonight will be a good night.

>> greg: you remind me of the year i met john gibson in the steep room. hemmer was there. i think they drugged me. it woke up somewhere in new jersey without my pants. it's predictable. i don't likebe new year's eve. a stupid thing. arbitrary thing. why be reminded i'm one year closer to death. i don't need that. i prefer to sit home and watch reruns of "matlock" how you're supposed to spend it medicated on over the counter cold medicines. >> eric: we each picked our favorite, not our favorite story, because it's happy, but the big story of the year. kimberly, kick it off. your big story of the year. >> kimberly: i thought it was the superstorm sandy. specifically, when we had the little bear hug where christie, game changer for the election, where christie went and embraced obama.

that was a big deal. he was the main people surrogate for romney campaigning in the election for him to validate and say hey, this guy is doing a great job. didn't help days before the election. >> eric: big story. sandy. christie. two big stories. >> kimberly: yes. >> eric: juan, what about you, sir? actually i don't think there is any -- >> juan: i don't think there is any question. the big story of the year was the election. the big story here is the change in the way technology, media treats an election. i remember the debate. the first debate. won by romney. the way i was looking at it. obama is not doing bad. not doing great but basically you got to knock out the champ to beat him. it didn't see a knock-out. all my friends like sean hannity, i sit next two on twitter and they're scoring the debate minute by minute, everything going on in social media. in that case, romney was the winner. that's true with fundraising. each campaign raised

$1 billion. how much money is that? for what? >> andrea: how could you think that obama was doing just okay job? just h -- >> juan: i thought he was doing fine. >> andrea: the only person in the world. i wish you for my math teacher in high school. >> greg: mitt lost. like talking about the game won by the last place team. it doesn't matter. >> eric: not surprised this is the big story. >> juan: how many hours did we spend talking about the election? >> eric: hours. >> juan: thank you. >> andrea: give him a mulligan. do another one. eric, what about you? >> eric: my favorite story, i don't why, but the red bull, the guy who jumped out little space -- there it is. bombgartner, red bull jumped from space. i was glued to the tv when he did it. i think it's fantastic.

privately. private money. he just did something that i would love to do some sometime. i couldn't stop watching that. every sometime i see it, i love to see that. >> juan: you want to do that? >> eric: if i didn't have a 14-year-old son i'd do in a heartbeat. >> andrea: how much did it cost him? >> eric: i don't know. whatever it cost red bull they make -- >> andrea: he almost died, right? >> eric: one of the reasons -- he blacked outch he would have broken more -- >> greg: i black out all the time. not from that. >> eric: how can you jump out of is that cast? >> greg: i don't need to do that stuff. i'll tell you why. people like this are selfish. they go off and do the dare del activities. who bails them out and who has to climb up the mountain? poor guys that got to rescue the people. i keep more about the people that slip and fall in the streets than some guy jumping out of the plane. that is the truth. >> andrea: you always slip and fall on the street after night in the bar. >> juan: you could run in traffic if you need a thrill?

>> greg: exactly! >> eric: he is the only guy that jumped out of a little space capsule. >> kimberly: give it credit. cool. love it. great story. >> greg: oh, c'mon. jump up in a flame and then call me. >> juan: like michael jordan. what did you say? arbitrary to -- i think this is like manufacturered. for what? i don't even like roller coasters. >> eric: for a lot of reasons. ed are bull did it. freddie jump out and land in a hot tub with juan. >> andrea: i would do that. last weekend. >> eric: moving right along. >> andrea: my story of the year is obamacare and the supreme court ruling. not the story that dominated all year long but a big deal. the supreme court ruled that the mandate was upheld and

people have to buy health insurance. one third of the economy. even though might not be top of mind to everybody today, it will be top of mind for the rest of eternity and touch every single person in this country. it east a tax. you will be taxed forcibly. they held it up. huge issue and huge court ruling. you are looking at me like that is your biggest -- >> greg: no. that is a huge story. you added a new arm to government. that is a big deal for a lot of people. >> eric: surprising mike didn't make that his sub favorite story of the year. >> juan: she is right. in terms of the american history, the social safety net and this was the missing element. republican and democratic presidents tried to do it and failed to. it's an incredible accomplishment for any

president. >> eric: are your siz that we find new taxes in the law? medical device tax. investment tax. >> juan: look, everybody agrees there are blank pages. we don't know what is to come. >> andrea: doesn't that scare you? >> juan: what scares me, rather than get on board there are peep delight in congress shooting spitballs. >> greg: legitimate criticism is not a spitball. nancy pelosi didn't bother to read it. that is not a spitball if you flow a large portion of the economy going to government that do nothing right. that is not a spitballle just why do republican governors say we're not going to do this. let the fed do this. they said we don't like big

government. they should control it. to me this is just like we don't likebe you guys. >> andrea: they can opt out if they don't want to opt out. to me, we have to throw spitballs. a lot of promises were made. taxes wouldn't go up. premiums wouldn't go up. keep your doctor. all of those things not true. i think we will be talking about this story and this decision for years and decades come. just i agree. >> kimberly: this show next year at this time. >> andrea: count it. >> juan: get out of the hot tub before i shrivel. >> greg: hope and bo on "days of our lives" and on and off again. it spent a lot of time thinking about it. to me, the big story that changed the election was mitt dropping the ball in the third debate. it was about foreign policy and became something else entirely. an opportunity to nail

president obama on benghazi and bring it home and win an election and he chose not to. he chose to play it safe. to me, that was the turning point. he got bad advice. somebody said you know what? don't do this. or he had knowledge of what was going on, because he was given the knowledge by the white house so he felt compelled to keep it secret. the other thing, too, his son said mitt didn't want to be president. that is tragic to me. it might have meant that mitt would have been a good president. >> juan: do you think it's true? >> greg: people who don't want to be president the end to be good president -- tend to be good presidents. >> andrea: washington turned down power of king. >> eric: i disagree. it's such a demanding job -- >> greg: but to say, conservatives by nature do not like government.

natural inclination not to want to be in charge. >> eric: let me add something to the story. mitt romney blowing it in the last debate, candy crowley. second? second. misinformed, oh, yeah, president obama mentioned it. he wasn't prepared. >> he held back. >> eric: the second debate. third debate. >> juan: it's too complicated. >> eric: i don't -- actually i don't believe what tag said. revisionism. i think romney wanted it badly. the ten debates with the republicans. they got huge ratings for fox. he went all the way through, remember his famous, i bet you $10 million -- $10,000. great moments. 47% and the like. he wanted it. >> andrea: the biggest story it was nonstory. the story that wasn't.

the way the economy was. we never heard that story. just romney, the taxes. the biggest story of the year was journalists didn't cover the story. >> greg: throw benghazi in that was well. >> andrea: nonstory. programming note. catch kimberly and greg tonight on fox news channel all american new year's eve broadcast at 11:00 p.m. >> greg: we'll be in a hot tub. >> kimberly: no, we won't. >> eric: waiting for ball to drop. what did you say? you lost your pants in a hot tub somewhere? don't go away. much more to come. special including a look at some of the wild moments of the past year on "the five." don't miss it. ♪ ♪

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♪ ♪ >> kimberly: hello. welcome back to "the five" new year's eve special. to stuff we covered this year that we hope will go away in 2013. okay, i'm going to begin right here. if around the take. story i don't want to hear again or phrase is "fair share." this was a key component to the 2019 election. the president did use the phrase repeatedly. much to his success, ultimately. in the outcome of the election. the first time we saw a major presidential candidate using class warfare to create divide

amongst hardworking miles per hours to suggest people who pay majority of taxes are not contributing their fair share. >> juan: glad you let us know how you feel. democra >> kimberly: that was the point. >> eric: in 2016 you will hear it more. fair share. >> juan: here is so i don't want to hear again. take a look. or take a listen. ♪ ♪ ♪ gangnam style ♪ gangnam style >> juan: now that is something i can do without in 2013. it has swept the world. it's now the most watched video ever. it's in every -- i can't go to a ballgame. i can't go to the supermarket. i can't go to the dentist. the hot tub! check it out, greg. what is that from years past?

the ghost of, the ghost of new year's past. macarena? my gosh. ♪ macarena ♪ macarena ♪ hey, macarena >> kimberly: so, juan, was that music clip from your last vacation in puerto rico in the lobby? >> juan: in my new year's eve fantasy world. >> andrea: you worry when gangnam style is a wedding song. macarena is classic, permeated weddings everywhere. gangnam style will be here to stay. >> greg: the guy psy is galluping toward obscurity. in five years he will be doing porn or professional wrestling. seriously, i hate that guy. ja five years? -- >> andrea: five years? >> greg: maybe three. i can do the macarena and i can dowelie. >> kimberly: what about the

cabbage patch? running man? >> greg: bob knows those. gawp >> juan: what are you doing tonight? >> andrea: wouldn't you want to know? >> kimberly: she is all dolled up. actually she has glitter -- >> juan: she has glitter on. >> eric: you know how to dougie? >> andrea: i'll teach you. >> eric: teach me how to dougie? i know how to dougie? >> juan: been to a black wedding? electric flies. >> kimberly: that is not just at black weddings. that is at white weddings. that is racial. >> eric: do you know bob beckel claims to have won a disco dancing contest. >> andrea: on roller skates. >> eric: what? >> kimberly: he convinced me want to go rolling skating. he is a disco roller skating champ. right? >> andrea: he does have a picture, though. >> juan: wait. is bob in shorts on the roller

skate? >> andrea: he is not in roller skates in the picture. but put it up on "fox and friends." in white skip tight pants. it's traumatic. >> kimberly: i'm not wait -- not making it up. >> andrea: i'm not sure he won an award. he does exaggerate. >> kimberly: he said he won the lighting award for his house. >> andrea: he stole the lights off his neighbor's house. >> kimberly: so the neighbor would have less lights. he did this at 2:00 a.m. nothing good happens after 2:00. >> eric: the story i don't want to hear another one, newtown, connecticut, mass murders. america changed twice in 15 years. once at 9/11, a with the mass murders in newtown, connecticut. enough of this. the dialogue should open up about everything that goes on. what goes on in their minds. what causes them to do this. but do something smart. get the schools safe and locked down.

i hope we never have another one. my guess is we might. probably will. pray we don't. >> andrea: colorado, the batman movie shooting. disturbing. >> kimberly: that is why i rent pay for view. i was a prosecutor in the d.a.'s office, i had to hand a shooting. go to the scene. halle berry movie. i went in, the guy -- anyway, was shot by the police. nobody died except for bad guy. movie theaters, post traumatic movie stress disorder or something. >> andrea: i wish i could lighten everybody's new year's eve up. but i hope i never hear from again is sandra fluke. not a conversation lifter. we heard a lot from miss fluke. even getting her to headline the dnc, i thought was unprecedented. unemployment was almost in the double digits. million of people on unemployment line and you have

a georgetown law student headlining the dnc for free birth control. what a country. how far we have come. in most presidential elections, it would have been considered p.r. disaster. but this was genius. the democratic base love it. >> kimberly: speaking engagement. huge turn-out. ten people. those are your friends and family. phone a friend. >> andrea: she will get a job and pay for her birth control. >> juan: a note, that american women were plus ten for obama. >> andrea: that is sad. crept in the suburban bedroom. >> kimberly: okay. greg? >> greg: she will chair the department of afreed feminist in no time. what i don't want to hear from again, my banned phrases. banned phrase is not a phrase, but a body moven't. phaseer talk when they take the blackberry or iphone and

talk in it like this. rethink. wait for it. unpack. daylight. in the weeds. rock star. banned phrase, national conversation. >> kimberly: anymore? there were 3,000 additional this is a fox news alert. i'm bret baier live in washington. a senior democratic source saying the white house has a deal with republicans to avoid the fiscal cliff. a deal in the senate. however, there are still some questions about senate democrats which is why vice president biden s now and capitol hill we are told by sources to essentially get some of the liberal democrats to sign on to the deal avoiding the fiscal cliff. as you look live at the capitol dome, the light on top of the dome is lit because the

congress s in session. but we haven't seen the piece of legislation move forward, the specifics. as you look live, vice president biden walked into the democratic caucus meeting there just beyond where the reporters are standing there by the microphones and said happy new year, happy new year, isn't it great that you all are here tonight. so what about this deal that is shaping up? the house will not be taking it up tonight. they have adjourned for the night and they will reconvene in 2013. actually you noon tomorrow the house will come back. essentially the u.s. will go over the fiscal cliff. but what about this deal that is shaping up and may be a done deal? we now turn to chief congressional correspondent mike emanuel live monitoring all of the back and forth up on the hill. hi, mike. >> hi, bret, good evening. democratic sources feel like there is a deal between the white house and congressional

republicans to move forward on the deal. republican sources essentially vice president biden s up here to push it across the finish line. there are are some reluctant democrats who think that extending the bush tax cut should have a lower rate. they were hoping it would be only extended for are individuals making $200,000, couples making $250,000. all indications are are the number is going to be extended for those making up to $400,000 and $450,000. a compromise if you will and so bottom line the vice president has come up here to meet with senate democrats to it essentially push it across the finish line after a long day of negotiating with senate republican leader mitch mcconnell. he told members earlier in the day he thought he had a done deal this morning and the white house called and said we want you to take the sequester cuts to domestic and defense spending off the table to get rid of them essentially.

mcconnell said how about we do a two month extension on the sequester and pay for it in two months and find out in the two months how to pay for the cuts to make them go away rather than doing major damage to defense and domestic programs that democrats are worried about. a busy night here on capitol hill. crafting this into legislative language. the senate may still vote eventually later tonight and bottom line, vice president biden is here to dot hi i.s and cross the ts. >> let's review about the sequester and how this all started. a lot of people have been following this but some haven't frankly. even on new year's eve as we get ready to get up to the fiscal cliff deadline. the sequester was set up to be so unacceptable that members of both parties on both sides of the aisle would just say we

can't deal with that so we have to negotiate a big deal to deal with the deficit and debt. a balanced better deal than that sequester which is across-the-board cuts, heavy cuts for the pentagon. they didn't and that is why we are where we are. now, the scaled back deal is what you are saying the mini deal is what vice president biden is still trying to convince some skeptical liberal democrats in the senate to sign on to? >> absolutely right. they believed in president obama out on the campaign trail saying let's make these people of upper income above $250,000 pay more taxes. they were not happy with the negotiation because the republicans obviously don't want to raise taxes on anybody but if they are going to give the president who won reelection more revenue as part of a balance deal, if you will, they were willing to go up to $450,000 and so the vice

president is eceptionly say -- essentially saying to liberal democrats who want to raise taxes on more people this is a good deal and keeps us from going off the fiscal cliff. you need to get onboard with this and h help me pass this across the finish line. there may be a little bit of stroking of some democratic egos in the caucus meeting to try to get this done. >> mike emanuel, thank you. as we look live at the ohio clock, all the reporters crowd around any senator, any lawmaker frankly but it is all senators there on the senate side who is saying anything about anything that is going on. i can't tell who is talking right there but we will get the latest from our capitol hill producer who is up there getting every word. i want to turn now to ed henry, chief white house correspondent with the latest from the white house point of view. vice president biden -- i know who that is. that is senator mcconnell's spokesperson up there, don

stewart who is regaling reporters with some kind of details about behind the scenes. stu is telling the reporters from the republican point of view. ed, what about from the white house point of view you about how this deal came to be and what it looks like? >> as mike laid out he s exactly right that vice president biden, of course, played a pivotal role. known as the mcconnell whisperer as somebody who when you go back to the debt ceiling debate about a year and a half ago he unsticked that when it was stopped up. he was brought in sort of as the closer again yesterday to try to move this along. it is not a completely done deal yet. as you noted this sequester came about all because the cuts were supposed to be so onerous that lawmakers in both parties would never let them go through and yet they he went right up to the edge here. this is important this s just as mike said a two month

buydown. shut out the cuts for two months. come up with with other cuts. i'm told that half of the cuts will be defense. half will be nondefense some of the domestic spending that mike mentioned to basically cover the sequester for two months. at the end of february we will be back here again. essentially the can being kicked down the road just two more months. that is an important point. the other important point is that they still have to vote on this in the senate. that is why as you say vice president biden is up there trying to talk to some of the liberal senators who link the president gave away too much on taxes in terms of the threshold of $450,000 being the line. they think it should be $250,000, number one. number two is that i'm told the working thes been work the phones. you know he sealed this with leader reid and nancy pelosi in the house with phone calls tonight. they have to sell some of the rank and file no.s. part of the pitch is the top

rate for people above the threshold of $450,000 will will go back to the rate of 39.6%. there was talk it might be compromised down to 38%. 38.5%. behind the scenes they are trying to assure senators this is going to the full 39.6% to is suggest there is some pain there. the final point i would make is that a senior official here just told me look we are not spiking the ball just yet the because we he got get it past the senators and they got the to be onboard. nobody knows how conservatives, house republicans will be when it makes it to the house. as you know, there might be anger about the fact beyond the small number of cuts to shut off the sequester, no major entitlement reforms or cuts in here and that might be a big bone of contention. >> you mentioned speaker boehner. the house as i mentioned adjourned earlier tonight and they will meet again tomorrow, january 1 at noon, 2013.

speaker boehner's spokesperson brendon buck earlier tonight said all of this the back and forth this is all vice president biden and senator mcconnell and he said quoting here boehner and mcconnell have not spoken since last week. the staff is being apprised on what they have been working on. we have not been negotiating with any one which is interesting, ed, when you look at the possibility of whatever comes out of the senate if it comes out of the senate tonight and we keep talking about the possibility of this deal, you are right we have to get over the hump that you have to get over the 60 votes necessary to bring the bill to the floor of the senate and then they have to pass it through the senate. and then it goes to the house. now, speaker boehner the real question is here, ed, whether he brings up this piece of legislation. if it he does his own head check in the gop caucus and realizes that a majority of his majority does not support what is coming out of the senate.

>> right. and he s unlikely to bring it up as you suggest if he s not going to get a majority of republicans. the point being they could get the majority of 218 votes or whatever they need based on how many people show up by having a majority of democrats pass it through because the president may be able to get them in line and get democratic support to is support it. they may not want to bring it to the floor because let's not forget what is a big deal in up a can of days, john boehner has to face colleagues as the new congress convenes into 2013 and in order to become speaker he doesn't want to shove aside the conservative members tonight and into the early hours of tomorrow and ram this deal down their throat and have them two days from now say maybe be we he don't want you to be speaker are. this is delicate. you are are right to note what his spokesperson said earlier tonight that basically john boehner had not spoken to mitch mcconnell in about a week.

ha is extremely rare. why would they be saying that? perhapses from a strategic standpoint they realize it will help john boehner to say i didn't have anything to do with this, this was mitch mcconnell and joe biden. whether or not conservative members buy that is another question but it sounds like john boehner is saying i didn't have anything to do with this, guys. >> right. when we put up on the screen fiscal deal reached between white house and senate. >> exactly. >> it is in essence the white house saying they reached a deal and senate republicans saying they reached the deal but vice president biden trying to sell that deal and still a vote has is to happen. i should point out i mentioned that don stewart, senate minority leader mitch mcconnell's spokesperson was talking to reporter there we saw a moment ago in the gaggle of reporters, he said we're waiting to see if the vice president can sell this to his party.

stewart says biden and mcconnell will meet while they are up on capitol hill as you look live at ohio clock the area where senators and spokes people go. the senate republicans have not signed off on the deal. it is protocol. when asked how long until a vote, don stewart said "awhile everything always takes longer in the senate." and it does, ed. but we could be seeing a vote, you know, sometime past 11:00. it really doesn't matter as far as the clock goes before midnight east coast time because despite the fact that is the fiscal cliff deadline as we noted the house adjourned until tomorrow and essentially the u.s. is technically going over the cliff even though lawmakers can adjust and beat things back if they decide to pass whatever comes out of congress before wednesday. >> right. and the irs can sign -- give instructions to companies

around the country about paycheck withholding. it will take a couple of weeks to adjust what the new tax rates are anyway. that is why they have a little wiggle room beyond midnight tonight in terms of exactly what the tax rates will be. i will put up a little bit of a red flag in terms of joe biden the vice president trying to sell this to senate democrats. there are some senate democrats on the left who may say wait a second, if we go off the cliff and don't sign off on this deal instead of dealing with the threshold of $450,000 we will basically have all of the rates go back to the clinton levels and you lose the bush rates. and then they he could come back in three, four, five days and try to change the threshold and just have it $250,000 and above taxes go up. i'm not saying they will succeed in that but that is a possibility out there because another big thing that is happening in a few days is that senate democrats pick up more seats in the new congress. they picked up seats in the last election in the senate and the same thing in the the house

so speaker boehner's hand will be weakened a little bit more in the days ahead because democrats have more seats in the house and same deal on the senate. that is why it is so pivotal now. the midnight deadline is almost a little bit artificial. they will vote at some point if they can get if. the bottom line is they have to make sure they get this signed off on. if it languishes a few days some on the democratic side will say why are we giving in on the tax issue and x and y we might get a better deal if we let this play out. they want to make sure get this signed off on in the next few hours so there is no funny business. >> just recapping now. the white house believes that they have a deal with senate republicans. vice president biden is up on capitol hill actually trying to twist the arms of some senate democrats who may have some problems with this deal as it is developed. he is meeting now behind closed doors with democratic senators in a caucus meeting just off

where we saw there the ohio clock. i want to go through some of the specifics of this deal as we know it. i will read them. we used to have fancy graphics but this is breaking news so we will put up some live shots as i do. ed has been talking about them. first of all, on the income taxes an increase to 39.6% for individuals making more than $400,000 a year. families making more than $450,000 a year. previously that was 35%. as ed mentioned that is up to the clinton rate of 39.6. payroll tax a small cut in the social security tax for all earners will be allowed to expire. the alternative minimum tax, the amt will become a permanent patch which means it will be adjusted to match inflation and that is a big deal. it will -- used to be every year congress had to do an amt patch. that won't happen in this deal. it will be dealt with. dividends and capital gains

taxed at 20% for individuals making at least $400,000, couples or families $450,000. also an estate tax. there was some back and forth late in the day whether there was going to change but the framework had the estate tax at $10 million exception per couple with additional inheritance at 40%. tax credits for stimulus. business tax credits and a doc fix stopping 27% reduction in payments to medicare providers using spending cuts as offsets. in addition to that, ed, you are saying the sequester which is the across-the-board cuts would be essentially put off for a couple of months. >> delayed. >> and that sets up the second fiscal cliff battle that washington will deal with and that is over the debt ceiling. explain that for folks who may not be following it. >> exactly. and you are right to point that out because these are two more battles really colliding with

one another. kicking the can down the road, both parties on the sequester. two months from now we back here dealing with again whether or not they can come up with more spending cuts, more tax increases according to how the president is now saying it, he is saying it should be a split. he said that earlier at his event here that was criticized by republicans for looking like a campaign rally, looking like he was doing a victory lap. they deny that here and say the president was just rehe stating his principles here but he said this should be split between more are revenue and more spending cuts not just spending cuts. that is going to be controversial with republicans as you know. in two months they have to come back and buy down more of the sequester and shut it down more with more cuts and maybe more tax increases number one. number two as you say the debt ceiling we basically are close to reaching the limit tonight. remember, last week, the treasury secretary said we would be reaching the nation's debt limit, borrowing authority on december 31 the end of the

year but said he would take "extraordinary measures" to free up about $200 billion in more are funds and he said that would bye about two more months of the debt ceiling. a year and a half ago what had been a routine vote in the congress usually and suddenly became a huge battle. why? because republicans say that is a mechanism they have raising the debt ceiling, some the president and treasury secretary want that forces the president to the table to have more spending cuts. the white house insists he will agree to other spending cuts without in their words being hold hostage by the gop. the war of words will begin again. in two months another fight oh over the sequester. the across-the-board spending cuts that both sides say they hate and yet they are kicking the can down the road again. number two, a big fight again over lifting the debt ceiling. paying the bills or reaching the limit on our bore are rowing authority. that is the underlying thing here is that if any one thinks

the quote unquote deal if it goes through the house and senate and signed by the president in the next 24-48 hours if they think that is the end there is another big budget battle coming. two of them about two months from now, bret. >> before we take a quick break. one more thing before i let you go and do some more reporting. the event today really struck a lot of people. not just republicans who like senator mccain and others who went to the floor immediately to react to it as you take a look at the video. president obama had middle class families behind him as he has done before. what he said in there as you noted really caught some people and your perception of it and what it signals about the road ah head ahead of that other battle the debt ceiling? >> good question. because the republican perception of it was that here is the president who is feeling strong coming out of a big reelection victory and flexing

his muscles and flat out said republicans are going to in the days ahead say the only way po balance the budget is spending cuts and he said to the case of if they think that is the case they have another thing comeing that is not the way it is going to work. this is what sparks republican attacks on him in part, they said it today as you noted, senator mccain and lindsey graham and others thinking that he is just going to run the show and not work with them. on the white house side of things they say that is nonsense. they say the president was laying out his principles and saying this has to be bald. shouldn't just be -- has to be balanced. the perception, having a campaign style event at a day when both sides were trying to come together obviously roughled republican feathers and in the days ahead the last point i will make is that he showed them he s ready to battle them again and again in the days ahead. >> bret: ed henry live on the

white house lawn. we will be back there as you look live at the ohio clock. again, vice president biden meeting with senate democrats up there. keep it here on fox. we will have breaking details as we are going over the fiscal cliff. we'll see. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. ro price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. but thanks to hotwire, this year we got to take an extra trip. because they get us ridiculously low prices on really nice hotels and car rentals. so we hit boston in the spring-- even caught a game. and with the money we saved, we took a trip to san francisco.

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do we have a deal. in. >> happy new year. happy new year! >> bret: a fox news alert. vice president biden moments ago up on capitol hill just saying happy new year. isn't it great that you all are here. the white house believes they have a deal with senate republicans but part of the job biden is tosident bide season

sell the deal to senate democrats. despite the reports that the deal is completed and finished there is not a piece of legislation that has hit the senate floor. there hasn't been a single vote in congress yet and it is being pointed out that house republicans have seen no paper. a spokesperson for the house majority leader eric cantor says there is nothing to sign off on. in fact, house republicans adjourned forb the day and they will be back january 1 at noon. joining us our capitol hill producer who is on all things for us, fiscal cliff and otherwise. chad, thanks for being here. i guess the republicans in the house side are saying we don't have anything. that this is just vice president biden and senator mcconnell and until we do it is great to read all these stories but there is no deal. >> that has always been one of the concerns here that getting

buy-in from the house republicans will be hard because they always wanted spending cuts and always wanted to do something perhaps with the see questions it teresa a top aide to a house majority leader, eric cantor says we have no paper so there is nothing to sign off on. interesting to watch the dynamic. if this gets through the senate and moves to the house of representatives because the house democrats there are not going to want to care relationship all of the water on this. the house republicans are in charge in the house of representatives. and there is still some selling as you say that has to be done to senate democrats. i'm told by a spokesman to mitch mcconnell, don stewart told me that biden will probably meet with mcconnell later on here. when asked when there would be a vote. he said awhile. sounds like if there is going to be a vote in the senate tonight or tomorrow morning it will still be hours and don stewart said it always takes a

little longer here in the senate. >> bret: and it does. what about just for folks who don't perhaps know the logistics and parliamentary procedures not to get too in the weeds about senate parliamentary maneuvers but tell them how this will go once they get a piece of legislation that they will bring it to the floor and how they will move it if they have the votes to move it through the senate tonight. >> because it has revenue implication ups in the bill, article 1, section 7 of the constitution is clear that you you have to start with revenue raising bills in the house of representatives. what they have parked town in the senate parliamentary garage is a house bill already and they will strip that down and put the language of this bill into that and then hopefully if they pass that drive it back over to the house of representatives. they could conceivably pass this quickly even by unanimous consent if need be in the senate.

things can move sometimes very, very fast in the senate but the problem is that you also have the possibility of things moving very, very slowly. a number of republican senators and maybe even democratic senators who might want to take more time. tom harkin a democratic senator from iowa said earlier today he would like to take a look at this and perhaps take some debate time and that means you might have to file what is called cloture that cuts off debates and ends filibusters. it could take two rounds of 60 votes to pass that. if you get buy-in and you have the vice president here you can sort of twist arms and get past that. >> bret: we will break you off to do more reporting. thank you, sir, as always keeping us up to date. against the senate looks to be moving forward but you they are still twisting arms behind those doors as vice president biden is up there talking to senate democrats trying to move this legislation forward and as chad mentioned they need to move it forward through the senate, get over the logistical

hurdles and parliamentary hurdles and make sure are no one stands up in the way and get it on to the house where it is an entirely different selling job there. covering all of the elements of the fiscal cliff here on fox news channel. by the way, it is new year's eve. keep it here. this family used capital one venture miles to come home for the holidays. that's double miles you can actually use... sadly, their brother's white christmas just got "blacked out." [ brother ] but it's the family party! really jingles your bells, doesn't it? my gift to you! the capital one venture card! for any flight, any time! that's double miles you can actually use! how illuminating. what's in your wallet? let me guess, am on the naughty list again? ho ho ho!

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a fox news alert. i'm bret baier live in washington. covering all things fiscal cliff. as we are ticking down to 2013 we are also ticking down to the deadline is set up by politicians here in washington. it deadline that was supposed to be so unapeeling they would not -- unappealing they would not get near the sequester and across-the-board cuts and tax

hikes that would ensue, the expiration of the bush era tax cuts. here we are just about two hours away and joining me on the phone, a.b. stoddard with the hill. your take of all of this and how this s developing? >> bret, i'm not surprised that people are scrambling to try to get it done. not going to make the cliff deadline but there is an attempt by republicans and democrats to get something done before this really becomes meaningful and there is a few hours into the january 1 and 2 dates where they can still stop something severe from happening. you heard today the beginning of the spin from the republican side from senator mitch mcconnell the republican leader on the senate side saying this is is the most important thing is that we fix this tax rate hikes problem. that is the most important thing he said. so the sequester, the draconian cuts that everyone said for 17 months we could not abide is the hardest part that is left

undone. now, looking at a 60 day patch. a temporary way of dealing with it, not again replacing reality and replacing the sequester with reasonable thought out spending cuts. the parties are polarized and paralyzed but they desperately don't want to tell the middle class in the country that they face a tax hike in the next pay period. we will see a lot of relief at some vote that comes soon. we don't know the details exactly yet because the senate has to have something official and then the house republicans will have to bless it. but the battle goes on and we know that the debt ceiling increase comes within the next six weeks and then there is a big fight to come on once again, the problems that really dog us in terms of entitlement reform and our long standing debt crisis. so this is going to be portrayed as a big relief so

that people at home who are paying their holiday bills feel like the congress acted. but you and i know and many people following this closely that the work goes on. >> bret: in fact, a.b., it is possible that the deal, this mini deal could actually increase is the deficit despite all of the talk back and forth. you know, it still has to be scored by the congressional budget office. the fact that this town has to operate in a crisis situation at all times i mean you have covered this place on capitol hill for a long time now. it is we are going to approach another one with the debt ceiling battle as you mentioned is yet to come. >> and we really see a situation with this sort of long-term gridlock deteriorating not only our sort of political system at home but internationally, the global markets are watching. since july of 2011 they thought okay we'll let them see, you know, let them get over ts